As part of his promise to tackle drug addiction, Gov. Christie is pushing to mandate insurance coverage for substance-abuse treatment. But the plan is raising concerns over costs and availability of treatment beds.
Legislation advanced Monday by Senate and Assembly committees would require that people with insurance be covered for 180 days of inpatient and outpatient substance-abuse treatment without needing prior authorization. The treatment would have to be considered “medically necessary” by the person’s doctor, psychologist, or psychiatrist, although insurers could review the necessity of inpatient benefits after 28 days.
While the Affordable Care Act requires substance-abuse coverage, New Jersey could account for the federal law’s potential repeal by passing state legislation.
“If the federal law goes away, it reverts to whatever the old state law was,” said Joel Cantor, founding director of the Center for State Health Policy at Rutgers University.
Even with the federal law, advocates say, insurers denying treatment coverage continue to be a problem. States have “not been very good” at enforcing parity requirements for behavioral health coverage, said Wayne Wirta, president and CEO of the National Council on Alcoholism and Drug Dependence-New Jersey.
While not everyone needs six months of treatment, Wirta said, “part of me says, we’ve been dealing with this issue since the early ’90s, and we haven’t gotten anywhere with it. Let’s stop arguing with the insurance companies over every damn case."
The legislation taken up Monday follows Christie’s State of the State speech this month, in which he called on lawmakers to pass a bill within 30 days. It also includes provisions to limit the initial prescription of opioids in cases of acute pain to a five-day supply, a separate proposal of Christie’s.
The bill would allow for coverage benefits to be reviewed after a person has spent 28 days receiving inpatient, intensive outpatient, or partial hospitalization services. The reviews would use an evidence-based clinical tool designated by state officials. The bill would also provide for expedited appeals if a person is denied benefits.
The legislation would not apply to Medicaid or Medicare, which are federal programs, or most large-employer plans, which federal law prohibits states from regulating, Cantor said.
It would affect 18 percent of New Jerseyans in commercial markets — including individual, small, and mid-size employer plans — and 10 percent in the State Health Benefits Program and the School Employees Health Benefits Program, according to the New Jersey Association of Health Plans.
In testimony submitted to lawmakers, the association, which represents the state’s leading health plans, said it was “not opposing the insurance provisions” in the bill heard Monday. But it went on to list concerns, including that “this bill will prioritize inpatient as a preferred treatment for opioid addiction over other more effective, less-costly treatment options.”
“You should be aware that there will be a significant cost to the State Health Benefits Program, and the coverage mandate will significantly increase premiums for all policy holders who buy insurance in the commercial marketplace,” the association said.
The fiscal impact is difficult to estimate, according to the association, which said that “only three states … of which we are aware have enacted legislation even remotely similar to this bill.”
Among those is Pennsylvania, which has a law that requires minimum benefits for alcohol and substance-use treatments, including 30 days of residential treatment services per year.
At a state Senate Health Committee hearing Monday in Trenton, some questioned whether New Jersey could provide the treatment it was mandating. “We have to understand what we’re creating and what’s going to happen” as a result, said Sen. Robert Singer (R., Ocean). “We need a tremendous amount of beds to meet what we’re planning to do here.”
Inpatient care is “not always the first line of defense,” Sen. Joseph Vitale (D., Middlesex) responded to Singer, pointing to medication-assisted treatment as an alternative.
A spokeswoman for the state Department of Human Services said she did not have information readily available Monday afternoon on the availability of substance-abuse treatment and unmet needs in the state.
“There is an inadequate supply of substance-abuse treatment services, period. Not just in New Jersey, but around the country,” said Cantor.
Forcing insurers to pay for benefits “could help assure providers a future stream of revenue to support services,” making treatment more available, he said.
Others spoke Monday of challenges to opening treatment centers, including zoning battles. “I used to have a saying: It’s easier to open up a gentlemen’s club in this state than it is to open up a drug and alcohol treatment program. And that’s not far off from the truth,” Tom Allen, co-founder of Summit Behavioral Health, told Senate lawmakers.
The possible repeal of the Affordable Care Act — which President Trump and congressional Republicans have advocated — could also affect access to treatment, depending on what replaces it.
Jessica Knowles, clinical outreach director of the Humble Beginnings Recovery Center in Cherry Hill, said many of her clients were young adults covered under their parents’ plans until they are 26.
Knowles told the Senate committee she had worked with active military families whose plans do not cover substance-abuse treatment for their children.
“It’s extremely heartbreaking,” she said.
The legislation does not address what Robert Budsock, president and CEO of Integrity House, said amounted to the “biggest bed shortage”: treatment for the poor. The North Jersey treatment center’s 390 beds for that purpose are filled every day, though not necessarily its 30 beds for commercial-insurance payers.
Christie has said he has directed the state to work with federal officials to allow Medicaid funds to pay for substance-abuse treatment in facilities with more than 16 beds, which would help address the treatment shortage, Budsock said.
In the 1980s, insurers were “freely reimbursing” for addiction treatment, Budsock said. If the new legislation passes, “we will be swinging the pendulum back in the right direction,” he said, with a focus on “saving lives and less focus on fiscal concerns.”